Table 1 2019 KZA/AAOS Precourse Survey
KZA, Karenzupko & Associates, Inc.

AAOS Now

Published 12/31/2019
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Cheryl Toth, MBA

How Does Your Revenue Cycle Stack Up Against Your Peers?

Three data points and insights from KZA’s 2019 precourse survey

Each year, Karen Zupko & Associates, Inc., (KZA) sends a precourse survey to those who have registered for the KZA/AAOS coding and reimbursement workshops. The results provide insights on a variety of coding, documentation, and revenue-cycle processes and trends. In 2019, KZA received 178 completed surveys (Table 1 shows a breakdown of respondent roles).

This article summarizes three revenue cycle data points from the 2019 survey results and provides commentary and guidance from two revenue-cycle experts.

Less than half of orthopaedic surgeons collect presurgical deposits

Survey data indicate that only 48 percent of practices collect a deposit before the day of surgery. Thirty-eight percent do not, and 16 percent are not sure whether they do. This indicates significant room for improvement.

“Patient responsibility balances have soared over the last decade,” explained Cheyenne Brinson, CPA (inactive), MBA, senior consultant at KZA. “Collecting presurgical deposits is the biggest opportunity for most practices to improve their bottom line.” For example, Ms. Brinson said an orthopaedic practice that recently began collecting presurgical deposits saw revenue increase by 25 percent in just three months.

Amy Anderson, MBA, consultant at KZA, agreed, adding, “Failing to collect presurgical deposits is, frankly, a mistake practices cannot afford to make.” However, Ms. Anderson said that she often hears surgeons or staff say they are reluctant to collect in advance for fear that patients may perceive them as greedy or uncompassionate. “The reality is, most patients appreciate the price transparency and opportunity to make a fully informed decision about their health care. Although it’s a major paradigm shift for practices, patients appreciate knowing in advance what they will owe, so they avoid surprise bills,” Ms. Brinson said.

Both experts were quick to point out that patient balances are real money. “The amount you see on the report is the amount you can expect to collect at 100 percent,” said Ms. Anderson, “unlike insurance balances that are inflated by your fee schedule.” Furthermore, she suggested adding the total amount of patient balances to the amount your practice sends to collections. “This is your total opportunity for increasing revenue by collecting from patients up front.”

For those who are not convinced it’s worth it to collect presurgical deposits, Ms. Anderson recommended running an aged accounts receivable (A/R) report to see how much is owed by patients, not insurance. “If your practice management system can further segregate the A/R data to show how much is the result of a surgical procedure (most can),” she added, “that amount alone often runs into the high six figures, depending on the size of your practice.”

The takeaway: Make this the year you implement presurgical deposits. “As part of the surgical counseling process, provide patients with an estimate of their responsibility, factoring in their remaining deductible and out-of-pocket cost and their plan’s allowable fee,” explained Ms. Brinson.

Collecting at time of service needs improvement

Survey data show that, in addition to collecting copays, 64 percent of practices collect coinsurance and deductibles at the time of service at least 25 percent of the time, whereas 42 percent collect them more than 50 percent of the time.

“Time-of-service collections are a real opportunity for most orthopaedic practices,” said Ms. Brinson. “Most practices do a good job of collecting copays, but many patients have high-deductible health plans, with unmet deductibles and coinsurance. With a little groundwork and some training and scripting, better-performing practices inform patients of probable charges before the visit and then successfully collect from them for office visits, X-rays, injections, durable medical equipment, and other services.”

“You should expect the front-desk team to collect at the time of service for services not covered by copays,” insisted Ms. Anderson. “Provide them with information and tools that enable them to inform patients about potential costs when they schedule an appointment and to collect patient balances at checkout.”

Ms. Anderson added that this part of the revenue cycle requires healthcare professional participation. “Staff can only collect if you provide them the Current Procedural Terminology codes in real time when the patient is checking out,” she explained. “Revenue cycle is a team sport, and staff needs your help to be successful.”

The takeaway: Collecting at the time of service can increase revenue, significantly reduce A/R, and reduce the number of patient statements generated. But it requires a shift in philosophy, as well as preparation and training. Ms. Brinson has helped countless practices implement upfront collections and created the free Ultimate Guide to Collecting at the Time of Service to help with the details, available at http://tosguide.pagedemo.co.

The first step, she said, is to obtain payer fee schedules and provide a way for staff to access that information quickly and easily. “You’ll also need to create an instruction manual that includes scripts and step-by-step procedures on how to read/interpret remaining deductible, coinsurance, and out-of-pocket benefit information inside the practice management system,” Ms. Brinson said. “Of course, training is essential. Reading and interpreting patient benefit information are challenging, and it can take time for staff to become comfortable with the time-of-service collections procedures.”

More than half of orthopaedists do not offer patient financing or healthcare credit card option

“In our experience, the most successful practices collect or attempt to collect 100 percent of patient responsibility amount for elective cases,” said Ms. Brinson. “Offering patients third-party healthcare financing, with deferred interest and other financing plans, is a sound strategy for success,” said Ms. Anderson. She added that just as you would provide staff access to technology and other tools necessary to do their jobs well, “We believe in providing tools that help patients pay their bills. CareCredit, an AAOS partner; deferred interest and financing programs; and other financing options allow patients to move forward quickly with the procedure they want or need and pay in convenient monthly installments. The best part is that the practice doesn’t become the bank.”

The takeaway: Practices that collect patient-responsibility amounts for elective cases up front will benefit from offering patients multiple payment options, and that includes financing. “Not all patients are able to pay for a surgery deposit in full,” said Ms. Brinson. “Offering a financing option enables them to budget.” She added that for those who do not qualify for outside financing, many practices offer an internal payment plan: “Having options for patients who cannot pay in full is essential and improves collection success.”

Cheryl Toth, MBA, is the director of content development for KZA, which develops and delivers the AAOS coding and reimbursement workshops.

Tips for improving revenue cycle in 2020

  1. Collect at the time of service for office visits and surgery. Most practices could boost their revenue by $25,000 to $75,000 per surgeon by doing this.
  2. Adequately document failed conservative treatment in the office note to support that advanced imaging or surgery is indicated. The amount of administrative time spent piecing together information that may or may not exist in the patient’s records is astronomical. A concise summary of the failed conservative treatments, with dates and specifics, significantly reduces the amount of time it takes for preauthorization to be approved.
  3. Be proactive with denials. Most denials we see in practices are preventable. Review denial patterns and develop a plan to address them proactively.

—Cheyenne Brinson, CPA (inactive), MBA, of KarenZupko & Associates, Inc. (KZA)

  1. Fully preregister patients at the time of scheduling, which includes capturing their full insurance information and verifying eligibility. This essential step lays the groundwork for tips 2 and 3.
  2. Collect from patients at the time of service.
  3. Collect presurgical deposits.

Tips 2 and 3 are the two most impactful things a practice can do to increase patient collections and decrease patient accounts receivable.

—Amy Anderson, MBA, of KZA